Investment Is A Game Of Risk, But Are You Increasing Your Odds Of Loss?

Investing in stocks and shares of any kind is a risky business. You likely realized that when the money you invested become ‘risk capital’. There are never guarantees when it comes to money placed here, and the chances are that you knew that going in. But, what happens if every penny reaps no returns? Surely you’re doing something wrong for things to go so badly every time you trade?

It’s vital you know that sometimes, that’s just the luck of investing. It’s possible there’s nothing you could do to change the outcome of your efforts. But, there is a possibility that your continual lousy luck has a stronger foundation than being the ‘luck of the draw’. Though there’s no rhyme or reason to this business exactly, there are sure ways to get it wrong. Avoiding the following at least ensures you won’t make silly mistakes which worsen your odds.

You’re too focused on the big bucks

People who look to big bucks during trading rarely make them. Doing this only ensures that every loss will be substantial. So, if you’re falling into this trap, stop now. It might be alright for wall street brokers, but you’re not a professional. What’s more, you don’t have that kind of money to play with. As such, keep your eye on smaller investments which offer a more likely return. After all, a company might not be able to return hundreds of thousands, but a few hundred dollars should come back no problem. Instead of focusing on big names with hefty minimum investments, look to small companies, or those starting up. And, whatever you do, don’t let greed get in the way of logic.

You assume you know it all

Another mistake would be to assume you know everything about investing. Knowledge is essential if you’re to stand any chance. But, remember that there’s no one size fits all method. Just because you did your research for one investment doesn’t mean you can handle another. Instead, you should do as much research into each stock as you can. It’s also worth turning to help from companies like Collective2 who offer algorithmic trading designed for people. With algorithmic trading, mathematical know-how helps you make the best investment decisions. Again, this is no exact science, and you might get some bad results. But, you can at least be sure you’re on the right track to seeing some return.

You’re in the wrong trade

It’s also possible that you’re trading in the wrong ways. In some sense, this relates to your assumption of knowledge, too. There are a host of trading types, and each is suited to different situations. In stocks and dividends, for instance, you have to choose between common shares and preferred shares, which both have very different lifespans and returns on them. If you don’t see the returns you expect, ask whether your investment methods are the best ones for the job. If not, a switch here could see the returns you’ve been waiting for.